The lawsuits filed today in Manhattan federal court were
followed by an SEC statement that it had entered into non-
prosecution agreements with each lender. Fannie Mae, the
government-sponsored enterprise which issues almost half of all
mortgage-backed securities, and Freddie Mac, the McLean,
Virginia-based mortgage-finance company, had “agreed to accept
responsibility” for their conduct, the SEC said.

In the lawsuits, the SEC said Syron, Mudd and others
understated the lenders’ exposure to subprime mortgage loans.
From 2007 to 2008, Freddie Mac executives said the company’s
exposure was between $2 billion and $6 billion when it was
actually as high as $244 billion, according to one SEC
complaint. From 2006 to 2008, Washington-based Fannie Mae
executives said the firm’s exposure to subprime mortgage and
reduced documentation loans was about $4.8 billion when it was
nearly 10 times greater, according to the regulator.